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<< Older News  |  September 17, 2021

News

All News > ERISA Preemption

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Seventh Circuit: ERISA Does Not Cover Charter School Teachers
DeBofsky Sherman Casciari Reynolds P.C. Link to more items from this source
Sept. 2, 2021

"[T]he court discussed the nature of charter schools and what distinguishes them from purely private schools, which led the court to find: '[A] charter school in Illinois is part of the set of public educational offerings, which makes it appropriate to conclude that the school district may include charter-school teachers in its pension and welfare plans without losing its exemption under ERISA.' " [Graham v. Board of Ed. of City of Chicago, No. 19-2745 (7th Cir. Aug. 10, 2021)]

Tags: ERISA Preemption  •  Health Plan Policy  •  Retirement Plan Policy

Eighth Circuit Holds That Maine Ban on Discretionary Authority in Health Plans Does Not Apply to AD&D Insurance Policy
Roberts Disability Law Link to more items from this source
Aug. 26, 2021

"The court found that the statute does not apply because the AD&D policy does not meet the requirements of a health plan under Maine law. Specifically, it does not provide for the financing or delivery of health care services nor is it subject to the federal [ACA]. Because Maine's ban on discretionary clauses applies only to health plans, the court reviews Unum's decision for an abuse of discretion." [Williams v. Unum Life Ins. Co. of America, No. 20-1694 (8th Cir. Aug. 24, 2021)]

Tags: ERISA Preemption  •  Health Plan Design  •  Misc. Benefits

What a Difference Discretion Makes
Kantor & Kantor Link to more items from this source
Aug. 19, 2021

"The appellate court explained that the California statute could be read to apply if a policy covered even one California resident, even if the claimant was not a California resident himself. However, the Court concluded that such an interpretation would violate the Commerce Clause and thus be unconstitutional. [That] interpretation would also be a logistical nightmare since the standard of review in any one case would depend on the residence of all the other plan participants.' [Mayer v. Ringler Assocs. Inc., No. 20-1281 (2d Cir. Aug. 12, 2021)]

Tags: ERISA Preemption  •  Health Plan Administration  •  Health Plan Policy

Seventh Circuit Ruling Highlights ERISA Contradiction Related to Preemption
DeBofsky Sherman Casciari Reynolds P.C. Link to more items from this source
Aug. 18, 2021

"This ruling illustrates the complexity of ERISA preemption and the law's internal contradiction between the exclusive benefit rule and the parallel responsibilities of corporate officers and directors who are permitted by ERISA to also serve as plan fiduciaries. However, though the decision in this [bankruptcy case involving an ESOP valuation] solves one problem, it leaves a second problem unresolved. It remains unclear how Argent and Stout could be sued, since the trustees lacked standing to bring an action under ERISA." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption

Discounted Premiums on Individual Disability Policies Do Not Create ERISA Plan
Thomson Reuters / EBIA Link to more items from this source
Aug. 12, 2021

"While it was clear that the employer paid no portion of the policy premiums, the insurer argued that the premium discount was effectively a company contribution. But the court rejected this contention, explaining that discounted premiums are not considered employer contributions unless the employer negotiated or was otherwise involved with the discount[.]" [Shrago v. UNUM Life Ins. Co. of Am., No. 80-1097 (D. Md. Jul. 28, 2021)]

Tags: Disability Plans  •  ERISA Preemption

Embezzler’s 401(k) Tapped for Restitution
American Retirement Association [ARA] Link to more items from this source
Aug. 11, 2021

"A magistrate judge rejected Frank's core contention that ERISA bars the government's seizure of his 401(k) account, noting that the key question was 'whether the [Mandatory Victims Restitution Act's] directive mandating victim restitution trumps ERISA's robust protection of retirement funds'--concluding that it does. He also noted that that reading was consistent with the view of every court of appeals and district court to have considered the issue.... The district court accepted nearly all of the magistrate judge's findings ... The appellate court concurred[.]" [United States v. Frank, No. 20-6706 (4th Cir. Aug. 10, 21)]

Tags: 401(k) Plans  •  ERISA Preemption

Seventh Circuit Revives State Law Claims Against Executives Acting as 'Dual-Hat' Fiduciaries
Jackson Lewis P.C. Link to more items from this source
Aug. 9, 2021

"The Court reasoned that ERISA did not preempt state law corporate claims against executives who serve dual roles as both corporate fiduciaries and ERISA fiduciaries because such state claims did not interfere with how Congress intended ERISA fiduciary duties to operate ... Also important to the Panel was the concept that as to these state-law claims, Plaintiffs were not circumventing ERISA's remedial scheme.... The exclusive benefit rule's preemptive force ... protected the Trust Company's retained independent appraiser against state-law liability." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption  •  Fiduciary Duties

Two Hats, No Preemption
Kantor & Kantor Link to more items from this source
Aug. 5, 2021

"The court found the plaintiffs' claims are not preempted because ERISA contemplates parallel state-law liability against directors and officers serving dual roles as both corporate and ERISA fiduciaries and ERISA explicitly allows corporate insiders to serve as ERISA fiduciaries." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption  •  Fiduciary Duties

Seventh Circuit: ERISA Does Not Preempt State-Law Fiduciary Claims Against Dual-Hat Corporate Directors and Officers
Thomson Reuters Practical Law Link to more items from this source
Aug. 3, 2021

"[T]he Seventh Circuit held that ERISA did not preempt the creditors' state-law claims because ERISA contemplates that directors and officers such as the defendants may have parallel and independent duties to a corporation -- in addition to their ERISA fiduciary duties. Focusing on ERISA's conflict preemption rules, the court considered whether (and how much) the creditors' state-law fiduciary duty claims interfered with ERISA's fiduciary duties." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption  •  Fiduciary Duties

Ninth Circuit Affirmation of CalSavers Decision May Forecast State Auto-IRA Nightmare for Some Employers
Thompson Hine Link to more items from this source
Aug. 2, 2021

"The CalSavers decision clearly does not provide for a blanket exemption to other state programs and thus, ERISA preemption will likely continue to be considered on a program by program basis.... This patchwork of programs that vary from jurisdiction to jurisdiction will present compliance challenges that are not insignificant for multistate employers, particularly those with nontraditional workforces who historically have not been eligible to participate in an employer sponsored retirement savings plan." [Howard Jarvis Taxpayers Ass'n v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021)]

Tags: ERISA Preemption  •  Retirement Plan Design  •  Retirement Plan Policy

Seventh Circuit Holds ERISA Does Not Preempt Bankruptcy Creditors' State Law Claims Against Corporate Directors and Officers
Roberts Disability Law Link to more items from this source
July 30, 2021

"The court noted the limited precedent in this area but that the Fifth Circuit and several district courts have held that ERISA does not preempt corporation-law claims against dual-hat directors and officers." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption  •  ESOPs  •  Fiduciary Duties

Ninth Circuit Ruling Reminds ERISA Plans of the Importance of Administrative Accuracy
Faegre Drinker Link to more items from this source
July 28, 2021

"[The Ninth Circuit] vacated the district court's holding that state-law professional and negligent misrepresentation claims were preempted.... The plaintiffs, utilizing [a benefits portal provided by the plan recordkeeper, had] requested statements showing their monthly pension benefit based on participant-entered assumptions. The statements created using these assumptions grossly overestimated the benefits to which they were entitled." [Bafford v. Northrop Grumman Corp., No. 20-55222 (9th Cir. Apr. 15, 2021)]

Tags: ERISA Preemption  •  Retirement Plan Administration

Fifth Circuit: ERISA Completely Preempted Health Providers' Tortious Interference Claim Against NFL
Thomson Reuters Practical Law Link to more items from this source
July 8, 2021

"[T]he court concluded that interpreting the plan terms ... was essential to the provider's tortious interference claim. This was because the claim ... hinged on the participants' coverage under the plan and ability to assign plan benefits. Accordingly, ERISA completely preempted the providers' claim." [Advanced Physicians, S.C. v. National Football League, No. 20-10998 (5th Cir. Jul. 1, 2021; unpub.)]

Tags: ERISA Preemption  •  Health Plan Administration

Fifth Circuit Holds Medical Provider Tort Claim Against NFL Is Preempted by ERISA
Roberts Disability Law Link to more items from this source
July 6, 2021

"The court explained that the essence of Advanced's claim is that the NFL facilitated a coverage denial. To prevail on its state-law claim, Advanced has to show that its patients were covered by the ERISA plan, that they assigned their right to plan benefits to Advanced, and that the claims would not be excluded under the terms of the plan. Because plan interpretation is essential to Advanced's tort claim, it is completely preempted." [Advanced Physicians, S.C. v. National Football League, No. 20-10998 (5th Cir. Jul. 1, 2021; unpub.)]

Tags: ERISA Preemption  •  Health Plan Design

Fourth Circuit Largely Rules for Plaintiffs in Class Action Challenge to Aetna/Optum Billing Practices
Kantor & Kantor Link to more items from this source
July 1, 2021

"[T]he Fourth Circuit covered the whole shebang of ERISA: standing, fiduciary status, party in interest status, restitution, surcharge, disgorgement, and declaratory and injunctive relief for both an individual and a class. This opinion, which reads like an ERISA treatise, serves as a reminder of the many layers that exist within ERISA and its equity-based common law. What is not layered is the issue at the core of the suit: money." [Peters v. Aetna, No. 19-2085 (4th Cir. Jun. 22, 2021)]

Tags: ERISA Preemption  •  Fiduciary Duties  •  Health Plan Design

The Ninth Circuit's Jarvis Opinion: A Correct Application of Retrenched ERISA Preemption
Prof. Edward A. Zelinsky, via SSRN Link to more items from this source
June 30, 2021

"Jarvis is well-reasoned and will be followed by other courts if there are ERISA-preemption challenges to any of the many state-sponsored private sector retirement savings programs modeled on CalSavers.... Jarvis reflects the retrenchment of ERISA preemption and the realignment of the U.S. Supreme Court's ERISA preemption case law to implement that retrenchment." [Howard Jarvis Taxpayers Ass'n v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021)]

Tags: ERISA Preemption  •  Retirement Plan Design  •  Retirement Plan Policy

Colorado Court Finds ERISA Preempts State Divorce-Revocation Statute
Littler Link to more items from this source
June 23, 2021

"The decision ... settled an open question in Colorado regarding whether ERISA preempts 'post-distribution' lawsuits under Colorado's divorce-revocation statute. Specifically, the court held that ERISA preempts lawsuits against a former spouse to recover plan benefits that were distributed to the former spouse as the named beneficiary." [Ragan v. Ragan, No. 20CA0038 (Col. Ct. App. May 27, 2021)]

Tags: ERISA Preemption  •  Misc. Distribution Issues

Can PBMs No Longer Rely on ERISA Preemption to Avoid Certain State Laws?
Foley & Lardner LLP Link to more items from this source
June 16, 2021

"Recent court trends suggest that preemption under [ERISA] may not apply to certain state laws that regulate pharmacy benefit managers (PBMs), including state laws governing Maximum Allowable Cost (MAC), which is essentially the process used by a PBM to determine in-network pharmacy reimbursement rates for generic drugs and multi-source brands.... [An] interactive map ... summarizes which states currently have a MAC law in place."

Tags: ERISA Preemption  •  Local Regulation  •  Prescription Drug Costs

Second Circuit Decision on Statute of Limitations Is Favorable to Health Plan Administrators
Hinshaw & Culbertson LLP Link to more items from this source
June 8, 2021

"[W]hile the Second Circuit did not analyze what Cigna needed to prove to recover the alleged overpayments received by the labs under ERISA Section 1132(a)(3), the opinion states that showing fraud is unnecessary. It may be sufficient for the fiduciary to show that the payments were prohibited by the terms of the governing plan." [Connecticut General Life Ins. Co. v. Biohealth Labs, Inc., No. 20-2312 (2d Cir. Feb. 10, 2021)]

Tags: ERISA Preemption  •  Health Plan Administration

No ERISA Entanglements with California's State-Run Auto-Enrollment IRA, Says Ninth Circuit
Hunton Andrews Kurth LLP Link to more items from this source
June 7, 2021

"Despite an 'effective ERISA reference' in CalSavers's exemption of employers with ERISA plans, the Ninth Circuit distinguished it from other preempted state laws that sought to exclude ERISA plans: CalSavers was not specifically designed to affect employee benefit plans; it only operates where employers do not offer retirement plans; and it ensures that employers with ERISA plans are not subject to additional requirements." [Howard Jarvis Taxpayers Ass'n v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021)]

Tags: ERISA Preemption

State Pension Mandate Not Preempted Even Though an Employer Chooses Not to Establish ERISA Plan
Seyfarth Link to more items from this source
June 7, 2021

"The Court of Appeals for the Ninth Circuit has once again upheld against an ERISA preemption challenge, a State private-sector benefits mandate, notwithstanding that ERISA provides that the decision to establish an ERISA plan rests solely with the employer.... It also is unclear whether the CalSavers decision will encourage private sector employers now without ERISA plans to establish (or refrain from establishing) plans." [Howard Jarvis Taxpayers Ass'n v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021)]

Tags: ERISA Preemption

Ninth Circuit Addresses Issues Related to Miscalculation of Retirement Benefits at Portals
Hodgson Russ LLP Link to more items from this source
May 28, 2021

"The court held that a request made at a portal satisfied ERISA's requirement of being a request made 'in writing.' ... The Court found that ERISA did not preempt state law claims of professional negligence against the recordkeeper." [Bafford v. Northrop Grumman Corp., No. 20-55222 (9th Cir. Apr. 15, 2021)]

Tags: ERISA Preemption  •  Fiduciary Duties  •  Retirement Plan Administration

PBMs Keep ERISA Preemption Fight Alive
Duane Morris LLP Link to more items from this source
May 20, 2021

"Five months after the Supreme Court of the United States handed down a loss to the pharmacy benefit manager (PBM) lobbying group Pharmaceutical Care Management Association (PCMA), PCMA filed a brief in the Eighth Circuit arguing that the Court's ruling does not narrow the scope of [ERISA] preemption for PBM regulation.... PCMA's filing signified the opening round of the next fight as to whether the Supreme Court's ruling will be narrowly construed to apply to rate-setting regulation or applied more expansively to preempt PBM regulation of other conduct." [Pharmaceutical Care Management v. Wilkie, No. 18-2926 (on appeal to 8th Cir.; appellant brief filed May 11, 2021)]

Tags: ERISA Preemption  •  Health Plan Design

Ninth Circuit: CalSavers Program Is Not Preempted by ERISA
Thomson Reuters Practical Law Link to more items from this source
May 12, 2021

"The central issue addressed by the Ninth Circuit is whether a program like CalSavers can be considered 'established or maintained by an employer.' The Ninth Circuit held that the State of California, not private employers, established and maintain CalSavers[.]" [Howard Jarvis Taxpayers Ass'n v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021)]

Tags: ERISA Preemption  •  Retirement Plan Design

Amicus Brief of Employer Organizations Seeking Ninth Circuit Rehearing of Seattle ERISA Preemption Case
American Benefits Council, Business Group on Health, HR Policy Association, Silicon Valley Employers Forum, and Society for Human Resource Management [SHRM] Link to more items from this source
[Opinion]
May 12, 2021

27 pages. "[T]he increasingly disruptive effects of multiple states and localities adopting similar requirements with respect to ERISA-covered plans demands that this Court reconsider the Panel's decision and rule in a manner consistent with Congress' intent in adopting the sweeping preemption provision included in ERISA." [ERISA Industry Committee (ERIC) v. City of Seattle, No. 20-35472 (9th Cir. Mar. 17, 2021; unpub.; petition for rehearing filed Apr. 30, 2021)]

Tags: ERISA Preemption


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